8/9/2021
After a natural disaster, having access to personal financial, insurance, medical and other records can help you start the recovery process quickly. There are several things you can do to help protect your financial safety in a disaster situation.
Here are some financial preparedness tips:
: Update emergency plans. A disaster can strike at any time. Personal and business situations are constantly evolving, so you should review your emergency plans annually.
Create electronic copies of documents. You should store your documents in a safe place. This includes bank statements, tax returns and insurance policies. It's especially easy to do this now since many banks give you statements and documents electronically. If your original documents are only available on paper, you can scan and save them on a USB flash drive or in the cloud.
Document valuables. Documenting your valuables by taking pictures or videos of them before a disaster strikes makes it easier to claim insurance and tax benefits. The IRS has a disaster loss workbook that can help you to compile a room-by-room list of your belongings.
Understand available tax relief in disaster situations. Information on Disaster Assistance and Emergency Relief for Individuals and Businesses is available from the IRS. You should also review the itemized deduction for casualty and theft losses. Net personal casualty and theft losses are deductible only to the extent they're attributable to a federally declared disaster. Claims must include the FEMA code assigned to the disaster. If you live in a federally declared disaster, can visit Around the Nation and click on your state to review the available disaster tax relief. If you live in counties qualifying for disaster relief, you will receive automatic filing and payment extensions for many currently due tax forms so you don't need to contact the IRS to get relief. If you have disaster-related questions, you can call the IRS at 866-562-5227 to speak with a specialist trained to handle disaster issues. You can request copies of previously filed tax returns and attachments by filing Form 4506: Request for Copy of Tax Return, order transcripts showing most line items through Get Transcript or call 800-908-9946 for transcripts.
Resources: Publication 584-B, Business Casualty, Disaster, and Theft Loss Workbook Publication 547, Casualties, Disasters, and Thefts Publication 5307, Tax Reform: Basics for Individuals
Families Publication 583, Starting a Business and Keeping Records